Running a restaurant in Malaysia can be both rewarding and challenging. According to the Malaysia Retailers Association, the food and beverage sector contributes over 5% of Malaysia’s GDP, with the restaurant industry alone generating billions of ringgit in revenue each year.
However, understanding your small business tax obligations is crucial for maintaining a healthy cash flow and ensuring compliance with local regulations. With over 30,000 registered food establishments in Malaysia, the competition is fierce, and staying on top of your taxes and finances is more important than ever.
This guide will walk you through the key aspects of small business tax in Malaysia, with a special focus on how foodpanda can help your restaurant attract more customers and increase revenue.
Financial Records and Receipts for Filing Taxes for Restaurants in Malaysia
One of the first steps to ensuring smooth tax filing is maintaining organized financial records. As a restaurant owner, you must keep detailed records of your income, expenses, and receipts. These include:
> Sales Receipts: Track every sale, including dine-in and delivery.
> Supplier Invoices: Keep a record of purchases for ingredients and supplies.
> Employee Wages: Record salaries, benefits, and tax deductions.
Tax-Related Documents: Retain documents for tax filing, such as GST or SST payments.
Proper record-keeping not only makes tax filing easier but also ensures your business stays compliant with the Malaysian Inland Revenue Board (LHDN).
Different Types of Taxes to Be Provisioned for Restaurants in Malaysia
As a small business owner, especially in the restaurant industry, you’ll need to account for several types of taxes. These include:
1/ Corporate Income Tax: The corporate income tax rate in Malaysia is progressive. For businesses earning up to MYR 600,000, the tax rate starts at 15%. For amounts above that, the rate is 24%. For smaller businesses, the first MYR 50,000 of chargeable income is taxed at 15%.
2/ Sales and Services Tax (SST): SST is applied to the sale of goods and services. For restaurants, the standard SST rate is 6%, but it may vary based on your business model and offerings.
3/ Withholding Tax: This tax is applicable when payments are made to non-residents for services rendered in Malaysia, such as marketing or consultancy fees.
Deductions to Help Save Tax for Restaurants in Malaysia
As a restaurant owner, it’s essential to take advantage of tax deductions that can reduce your taxable income. These may include:
> Depreciation on Equipment: Deductions for restaurant equipment like ovens, refrigerators, and tables.
>Employee Costs: Salaries, employee benefits, and training expenses are deductible.
>Advertising and Promotion: If you spend money on promoting your restaurant, such as on social media or foodpanda, these expenses can be deducted.
>Business Travel: Costs related to business travel for expanding your restaurant or meeting suppliers can also be claimed.
Tax Exemptions and Incentives for Restaurants in Malaysia
Malaysia offers a variety of tax exemptions and incentives, especially for businesses that contribute to the economy in specific ways. Some notable incentives include:
1/ Green Technology Incentives: If your restaurant adopts eco-friendly practices, such as using energy-efficient equipment, you may qualify for tax incentives.
2/ Investment Tax Allowances: If you invest in new equipment or infrastructure for your restaurant, you may be eligible for allowances that reduce your taxable income.
Utilizing Depreciation Allowances for Restaurant Equipment
Investing in restaurant equipment like ovens, fridges, and furniture can also be a way to save on taxes. Depreciation allows you to claim deductions on the gradual loss of value of these assets over time. This can lower your taxable income and reduce your overall tax bill.
Charity and Sustainability Tax Benefits for Restaurants in Malaysia
In recent years, restaurants that participate in charitable activities or sustainability practices may be eligible for tax benefits. For example, if you donate food to charity or implement waste-reduction practices, you might be eligible for specific tax exemptions or deductions.
How Listing with foodpanda Can Help Your Restaurant Attract More Customers
In addition to staying on top of your tax responsibilities, attracting more customers is crucial for growing your restaurant’s revenue. One of the most effective ways to increase your customer base is by listing your restaurant on foodpanda. Here’s how foodpanda can help:
1/ Increased Visibility: foodpanda’s platform gives your restaurant exposure to thousands of potential customers who are actively looking for places to eat.
2/ Delivery Services: With foodpanda, you can offer delivery, which is a growing demand in Malaysia. The added convenience of online ordering will attract more customers, particularly in urban areas.
3/ Promotions and Discounts: Through foodpanda, you can run special promotions or discounts to encourage new customers to try your restaurant.
4/ Easy Menu Management: The foodpanda portal makes it easy to update your menu, track orders, and manage promotions, helping you streamline operations and reach more customers effectively.
5/ Marketing Support: foodpanda provides its partners with marketing materials and growth webinars to help you build a stronger online presence and reach more potential diners.
Understanding and managing your restaurant’s tax obligations in Malaysia can be simple with the right knowledge and tools. By keeping accurate records, claiming the right deductions, and staying informed on tax incentives, you can optimize your business’s finances.
Most importantly, partnering with foodpanda can help your restaurant attract more customers, streamline operations, and increase revenue—making it the first and best step in growing your business.
